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Uzbekistan’s insurance companies to be fined for unjustified refusal to pay insurance claims

The Ministry of Finance, the State Tax Committee and the State Committee on Privatization, De-monopolization and Competition of Uzbekistan have adopted a joint resolution on the application of penalties for insurers in the amount of 0.09 percent of the minimum share capital for each unjustified refusal to pay the insurance indemnity.

According to the resolution, the insurer's refusal is considered unjustified when it is recognized by the court in accordance with the statement of the insured.

In addition, a surcharge of 0.05 percent of the minimum capital will be applied in the event of the failure by the insurer to meet the deadline set by the Ministry of Finance for submitting the report on the results of the activities to combat legalization of proceeds from crime and terrorism financing.

In case of failure by the insurer to present information upon request from the Finance Ministry on received cash and liabilities as well as other information within its competence, to acknowledge the insurant of the change of the insurer's corporate name, legal form or location, to undertake mandatory audit in prescribed manner, to invite the actuarial organizations to conduct an actuarial examination once a year, a fine of 0.09 percent of the minimum amount of the authorized capital set in accordance with the law on insurance business in Uzbekistan will be imposed on the insurer.

As previously reported, the minimum authorized capital for insurers operating in Uzbekistan in general insurance is set at the amount equivalent to no less than 1.125 million euros, for companies operating in life insurance -1.5 million euros, for the insurers functioning in the field of compulsory insurance - 2.25 million euros and for reinsurance companies - five million euros.

According to the decision of the country's leadership "On additional measures to further improve the financial stability of insurers" adopted in May 2011, following increase in the minimum authorized capital of insurers should take place in July 2014: insurance companies operating in general insurance should raise the minimum capital to at least 1.5 million, life insurance - to two million euros, compulsory insurance - to three million euros, reinsurance companies - to six million euros.

According to the 2012 results, 33 insurance companies were operating in Uzbekistan. The aggregate amount of the authorized capital of Uzbek insurers exceeded $ 150 million, while the growth of the insurance market amounted to 145 percent.

The official exchange rate on July 30 is 2107.93 soum / $ 1 and 2783.57 soum / € 1.